Drumbeat: January 16, 2010

Miguel Barbosa Interviews Albert Bartlett: “Arithmetic, Population, and Energy” – Puzzling Growth Rates

Is the culprit of global warming population growth? Are you suggesting that unless we have major breakthroughs in technology population growth will undermine most current energy initiatives?

Al Gore understands that population growth is the problem. But he doesn’t recommend doing anything to reduce overpopulation which is the cause of the problems.. It is politically incorrect to talk about population growth. The last US president that worried about population was Richard Nixon. He charted a major study called “The Rockefeller Commission Report.” This study was put together by some very talented people. Their conclusion was simple; they couldn’t see any benefit to further population growth in the US. Unfortunately, the study was put on the shelf and forgotten.

...You talk about how zero or negative population growth rates translate into higher standards of living. Can you comment on this?

Thirty years ago when the Chinese put their one child per family policy, there statement of justification was that population growth interferes with economic development. In 30 years, they have proven this is true. We in the U.S. haven’t learned this lesson – if you spend all your resources to take care of new people you have no resources to take care of existing citizens.

Oil drops on more signs of a struggling consumer

NEW YORK – Oil prices ran up against forecasts for warmer weather, people who won't drive or spend money and a stronger dollar.

Those factors combined for a fifth straight day of losses. Benchmark crude for February delivery slid $1.39 cents Friday to settle at $78 a barrel on the New York Mercantile Exchange. The price was down $4.75 for the week.

Government data raised more concerns about consumer spending power. The Labor Department reported that inflation-adjusted wages fell 1.6 percent last year, the sharpest drop since 1990. Energy costs were an additional burden, shooting up 18.2 percent last year — the biggest jump since 1979 — led by a nearly 54 percent rise gasoline costs.

PDVSA’s Supplier Debts Have ‘Vanished,’ Ramirez Says

(Bloomberg) -- Petroleos de Venezuela SA’s debts to oil-service suppliers have “vanished,” Venezuelan state oil Company President Rafael Ramirez said today.

The Caracas-based company owed oil-service suppliers, including drilling companies Schlumberger Ltd. and Helmerich & Payne Inc., as much as $5 billion in October and had debts of $7.56 billion at the end of 2008.

“The debts vanished,” Ramirez, who is also Venezuela’s oil minister, told reporters in Caracas. “We’re up to date with our service providers and in a situation of equilibrium.”

US natural gas rig count jumps 30 to 811 this week

NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States jumped 30 this week to a 10-month high of 811, according to a report on Friday by oil services firm Baker Hughes in Houston.

Natural gas under Gulf may be too much of a good thing

The prospect of yet another new frontier for U.S. natural gas development, this time in super-deep wells beneath the Gulf of Mexico's shallow waters, is not all good news for Houston's energy sector.

A big uptick in output from the emerging region — predicted this week after announcement of a major discovery there — would clearly signal new life for the heavily explored offshore region. But it could also boost already swollen U.S. gas supplies, weaken prices and keep producers on the sidelines.

Alberta minister says won't limit oil sands growth

CALGARY, Alberta (Reuters) - Alberta's new energy minister will not use legislation or regulation to control the pace of development in the Canadian province's oil sands, his spokesman said on Friday.

Earlier, in a newspaper interview, Energy Minister Ron Liepert mused about moving away from a policy that encouraged all oil sands projects to move forward. He clarified those remarks at a swearing-in ceremony, spokesman Jerry Bellikka said.

Controlling oil sands pace a risky move for Alberta

CALGARY, Alberta (Reuters) - Alberta's new energy minister would face more flak from the very oil industry he is trying to mend fences with if he tried to regulate the pace of development in the Canadian province's vast oil sands, analysts said on Friday.

Bright outlook for Petrobras

Brazilian state-run energy giant Petrobras may or may not have added to its proved reserves last year--depending on the criteria--but the company's overall outlook is still very bright.

Russia Opens Pipeline and Sets New Course

LONDON—Russia, the world's top oil producer, is set to make deep inroads into Asian energy markets at the expense of Mideast rivals thanks to a new pipeline that pumps crude from the oilfields of Siberia to a new terminal on the Pacific Ocean.

LOOP may halt tanker offloading due to rough seas

HOUSTON (Reuters) - The Louisiana Offshore Oil Port said on Friday it expects brief halts to tanker offloadings in the Gulf of Mexico over the weekend due to expected rough seas.

Chavez raises Venezuelan minimum wage 25 percent

CARACAS, Venezuela -- President Hugo Chavez announced a 25-percent increase in Venezuela's minimum wage Friday to try to blunt the effects of soaring inflation, and defended his handling of an energy crisis and other domestic problems.

Goldman Takes A Stab At Gold Bugs And 'Oil-Peak'ers, Says Dollar Will Flourish

Lastly, Goldman takes on the topic of "peak" oil - in summary, the firm claims, it is not a concern. All you who believe commodities are the safe haven from fiat FRN destruction, well - you are simply naive. Goldman said so.

2010 : The future at a crossroads

5. Oil prices inch higher in 2010. As world demand increases and peak oil becomes acknowledged, oil prices hit $100 a barrel, further depressing the U.S. economy. Geopolitical tensions, particularly in the Middle East, could drive oil prices much higher if war breaks out.

China and India Push Hard Down On the Petro Keynesian Gas Pedal

Riding the tiger of rising expectations and exponentially increasing needs in the world's two biggest nations, both China and India have only one option: growth. Currently this needs, and depends on fossil energy and depleting mineral and metal resources, and applies unremitting pressure on global natural systems and the environment. As their leaders many times said in the run-up to the COP15 farce, they are however only repeating the postwar economic miracle of the OECD. When or if the OECD group cares to cut its oil, gas, steel, aluminium, grains, oilseeds, sugar and rubber consumption to present per capita levels of Chindia, sustainability would mean something - or at least commodity price explosion would be less sure and certain.

"The Long Emergency" And What it Means for Your Community

Join James Howard Kunstler at a lively event on March 6 from 4-8 p.m. at the Gelston House at 8 Main Street in East Haddam [Connecticut].

Mr. Kunstler, author of "The Long Emergency -- Surviving the Converging Catastrophes of the 21st Century" will discuss the implications of peak oil and the suburban predicament. He urges the reframing of expectations and the reorganization of our economic activities in the face of unfolding environmental and social calamities.

A road map for greener transport

An Oxford University study says the best way to reduce emissions in the short term is a ‘drastic downscaling of both size and weight’ of conventional petrol and diesel cars.

The research by Smith School of Enterprise and the Environment suggests that we should not rely on manufacturers producing hydrogen or battery-powered vehicles in the next decade.

...Dr Inderwildi sees electric and diesel rail systems as the way forward in bringing down transport emissions but says there are disadvantages in the resulting infrastructure costs and lack of flexibility in route planning. Even so, reducing the carbon footprint of cars and replacing domestic flights with high speed rail could still produce ‘drastic emissions savings’.

Port of Los Angeles to Work with Vision Industries to Evaluate Zero-Emission Hybrid-Electric Trucks

SAN PEDRO, Calif.--Expanding its commitment to bringing cutting-edge, zero-emission solutions to port operations, the Port of Los Angeles is entering into negotiations with Los Angeles-based Vision Industries for the purchase and evaluation of Vision’s hydrogen fuel cell hybrid-electric trucks. The heavy-duty big-rigs will be tested to evaluate their suitability for short and medium distance cargo-hauling (or “drayage”) operations, and other similar applications.

Clean Coal Jobs? Author Mines History to Dispel Myths

In his frequent performances and in his new book Reckoning at Eagle Creek: The Secret Legacy of Coal in the Heartland, Biggers takes it a step further and pokes holes in the promise of clean coal jobs. Modern coal mining is so mechanized that relatively few miners are needed to extract the coal. Strip mining, which companies do whenever seams are close enough to the surface, is heavy on huge machinery and light on actual workers.

Underground, long-wall mining that is most in use now takes just a few men to run a machine that grinds away at the coal face without leaving behind the pillars which miners once skillfully carved out to hold up the roof.

Biggers also says that promises of many billions of tons of coal still in the ground are misleading, since much of this coal is too deep to be mined. He says the country is in a state of peak coal, similar to peak oil, with reserves already significantly declining. In other words, he says, massive investment in “clean coal” technology, and staking towns’ and regions’ economic futures on coal, will become moot in the not-so-distant future as coal dwindles.

Germany To Decide On Solar Subsidy Cut Next Week - Minister

SEVILLE, Spain -(Dow Jones)- The German government will decide next week on the size of a cut in state subsidies to solar power, while at the same time trying to convince its partners in the European Union to adopt a higher target for cuts to greenhouse gas emissions, German Environment Minister Norbert Roettgen said Saturday.

Power couple in Falmouth

FALMOUTH — The nearly 400-foot-tall wind turbine dedicated yesterday on a hill above the Falmouth Wastewater Treatment Facility may be a model for coupling Cape Cod's greatest energy resource with one of the region's greatest energy users.

International Power sees Ontario wind farm running by June

OTTAWA (Reuters) - International Power Canada expects to start commercial operation in June at its C$110-million ($106.8-million) Harrow wind farm in southern Ontario, the developer said on Friday.

Four 9.9-megawatt projects on the northern shore of Lake Erie will have a total installed capacity of 39.6 MW, generating enough power to serve nearly 12,000 homes annually.

Conference: Biomass needs regulatory, government support

Jim Stewart of the California Bioenergy Producers Association relayed a simple message to the 400-plus attendees of Biomass Magazine’s Pacific Northwest Biomass Conference & Expo: it’s time to begin confronting the real issues involved in developing a constructive statutory and regulatory environment for bioenergy production.

U.S. government says loans for nuclear plants complicated

WASHINGTON (Reuters) - U.S. Energy Secretary Steven Chu said on Friday that the process for approving federal loan guarantees for new nuclear power plants has become "complicated," but the department still expects to issue its first loan deals very soon.

"It was more complicated than I thought...these are multibillion dollar loans," Chu told reporters at a lunch briefing at Energy Department headquarters, when he was asked why it was taking so long for the department to make a decision on the loan guarantees.

Duck Hunters Triggered Pantex Lockdown, Official Says

“They had a report that there were some individuals armed and in camouflage,” in a field near the plant, said Gabe Medrano, a spokesman for the Texas Department of Public Safety. “They turned out to be duck hunters.”

Geothermal Drilling Safeguards Imposed

The United States Energy Department, concerned about earthquake risk, will impose new safeguards on geothermal energy projects that drill deep into the Earth’s crust.

The new policy is being instituted after a project in California that used the new technology was shut down by technical problems and encountered community opposition, federal documents indicate.

Paleontologist Peter Ward's "Medea hypothesis": Life is out to get you

What if the only thing life has to fear is life itself?

At a lecture Monday evening at the American Museum of Natural History in New York City, paleontologist Peter D. Ward laid out the argument that life as we know it serves to make Earth less habitable—a downward spiral that might spell the eventual end of life on the planet. Ward, a professor at the University of Washington, calls this the Medea hypothesis, named for the murderous mother of Greek mythology. It is a direct challenge to scientist and futurist James Lovelock's Gaia hypothesis, which asserts that life constantly tweaks the dials on Earth's control systems to keep the planet in a nice, habitable homeostasis.

Meteorologists as Climate Change Deniers?

Coleman's article, which has been widely disseminated and used by critics of global warming, reflects a curious anti-science, anti-academic position.

It's the typical populist argument that the ivory-tower eggheads are pulling a fast one on the world: "These scientists know that if they do research and results are in no way alarming, their research will gather dust on the shelf.... But if they do research that sounds alarms, they will become well known and respected and receive scholarly awards and, very importantly, more research dollars will come flooding their way.... Their like-minded PhD colleagues reviewed their work and hastened to endorse it without question."

This distrust of scientists is all the more evident when you realize that most TV meteorologists are not scientists -- and certainly not climate scientists. Few of them have graduate degrees, and only half have college degrees in atmospheric science.

'No Basis' for Excluding Climate Impacts From NEPA Reviews, CEQ Says

The White House Council on Environmental Quality has found "no basis" for excluding greenhouse gas emissions from National Environmental Policy Act reviews.

Responding to inquiries from Republican lawmakers, CEQ Chairwoman Nancy Sutley said NEPA "cannot be used to regulate greenhouse gas emissions" and that the Obama administration remains committed to energy and climate legislation to address those broader issues.

"Nonetheless, NEPA compels Federal agencies to consider environmental effects before undertaking significant actions or policies," Sutley wrote in a letter to the lawmakers late last month. "CEQ sees no basis for excluding greenhouse gas emissions from that consideration."

Meteorologists as Climate Change Deniers?

And so it goes. Meantime, Hansen and his bunch report 2009 the warmest year on record for Southern Hemisphere:

The past year, 2009, tied as the second warmest year in the 130 years of global instrumental temperature records, in the surface temperature analysis of the NASA Goddard Institute for Space Studies (GISS). The Southern Hemisphere set a record as the warmest year for that half of the world.


If only we can genetically engineer a peanutbutter fish we could feed the world...

"The news service reports, "Scientists believe climate change -- the warming of oceans -- has allowed some of the almost 2,000 jellyfish species to expand their ranges, appear earlier in the year and increase overall numbers, much as warming has helped ticks, bark beetles and other pests to spread to new latitudes."

"The AP reports that in October, off the eastern coast of Japan, "Jelly-filled nets capsized a 10-ton trawler as its crew tried to pull them up. The three fishermen were rescued." I know this all sounds like something out of a Godzilla movie, but it's serious stuff."


Reminds me of that story a year or so ago where a school? swarm?, herd?, flock? of jellys slipped through the netting and consumed all the fish in an off shore fish farm.

We better start taking some of this stuff seriously or else...

I heard this on the radio this morning :-

"Oyster reefs protect our shorelines from storm damage and provide a biologically rich habitat for hundreds of fish, crabs and birds. But we’ve literally eaten oysters out of house and home. Now researchers in Wellfleet, Massachusetts are experimenting with new methods to create oyster reefs."


Third segment.

Apparently, oyster beds are the most endangered marine habitat.

btw: it's a swarm of jellyfish...(I hope folks start developing a taste for them - they'll be all there is left)

Apparently, jellyfish are edible if properly prepared. I don't see why they couldn't be processed into Fish Protein Concentrate (FPC):


How about this ?

"Marinated Jellyfish with Chili Oil with Green Apple Tea
Chef Angelo Sosa, formerly of Yumcha - New York, NY
Adapted by StarChefs.com

Yield: 2 Servings


4 ounces pre-sliced jellyfish strips
1 Tablespoon chili oil
1 teaspoon toasted sesame seeds
1 teaspoon salt

Green Apple Tea:
4 green apples, juiced
2 limes, juiced
1 teaspoon sugar

½ ounce red onion, sliced into slivers
6 romaine lettuce hearts, trimmed down

For Jellyfish:
In a small bowl, lightly dress jellyfish with chili oil. Season with toasted sesame seeds and salt.

For Green Apple Tea:
Stir ingredients together in a container until sugar is dissolved.

To Assemble and Serve:
Scatter jellyfish onto a serving plate and sprinkle red onions and romaine hearts on top. Pour the apple tea tableside.

Wine Suggestion:
A delicate white such as Chardonnay."


More here :-


Ough... I'll stick to squid thanks.

I guess we could add in some sauteed crickets. . .

Some examples of insects on a stick:


I get cicadas in my yard...
I'd have to be pretty hungry, though.

Jellyfish are no joke ... serious as a heart attack!

A man has been airlifted to hospital after diving face-first into a marine stinger in the Whitsundays.

The 29-year-old had been on a yacht near South Mole Island yesterday afternoon when he dived into the water and was immediately stung in the face by an Irukandji.

He had been wearing a full-body stinger suit at the time.

The man was taken to South Mole Island in severe pain and was given first aid while waiting for a rescue helicopter to arrive.

The RACQ-CQ rescue chopper transported him to Mackay Base Hospital for treatment.

RACQ spokeswoman Leonie Hansen said the man was shivering and had gone into shock when paramedics landed on the island to stabilise him.

Box jellyfish are expanding their ranges in both hemispheres. Read the entire article in the wiki:

Reports of Irukandji syndrome have come from Australia, Hawaii, Florida, French West Indies, Bonaire, the Caribbean, Timor Leste and Papua New Guinea. It is presumed that cubozoan species other than Carukia barnesi are responsible for envenomations outside Australia.

The severity of the pain from an Irukandji jellyfish sting is apparent in the 2005 Discovery Channel documentary Killer Jellyfish on Carukia barnesi, when two Australian researchers (Jamie Seymour and Teresa Carrette) are stung. Even under the "maximum dose of morphine" Teresa remarked that she "wished she could rip her skin off", and is later seen writhing uncontrollably from the pain while lying on her hospital bed. In one scene, Teresa's feet are shown contorting and digging into the bed, and she's wiggling her toes and kicking her feet around - when the camera moves back, Teresa is seen rubbing her face, her body is contorting in agony, and her legs are rapidly sliding and kicking around on the bed. Jamie, at his worst, is also seen writhing in pain, curled up in a ball and barely able to speak. Jamie said he wished that he was stung by Chironex fleckeri instead since "the pain goes away in 20 minutes or you die".

Another recent program that aired on the Discovery Channel entitled Stings, Fangs and Spines featured a 20 minute spot on Irukandji syndrome. In the segment, a young Australian woman was stung and developed a severe case of Irukandji syndrome. In a testament to the severity of pain involved, a re-enactment (featuring the actual victim portraying herself) shows her screaming and violently thrashing around on the hospital bed in an almost convulsive state, for the bulk of the segment. She later commented that this unbearable pain lasted for hours, and added that "I didn't think it was possible for anyone to endure that level of pain without turning into a vegetable".

This reminds me of the recipe for mud hen:

Obtain a large piece of aluminum foil
Place a medium sized cow pat in the foil
Place the mud hen, whole, in the cow pat
Cover with another, similar sized, cow pat
Tightly wrap the cow pats and mud hen in the foil
Bake at 450 deg over night
Let sit for 48 hours
Carefully unwrap and dispose of mud hen
Eat the cow pats

Similar to the old New England recipe for porcupine:

Put the porcupine in a pot and cover with water.
Bring to a boil.
Add a large rock.
Periodically try to poke the rock with a fork.
When you can poke the rock with a fork, throw out the porky and eat the rock.

Coot is an ingredient in Cajun gumbo apparently.

And "The cornucopian du jour" price goes to:

Goldman Sachs

see above http://www.zerohedge.com/article/goldman-takes-stab-gold-bugs-and-oil-pe...

Well, WT, Mel and the rest of the gang: GS is making God's work one more time !

Dare you challenge ?

If you blow the oil chart up, found at this link, to 400 percent, you can make out about half the stuff there. Some of it is too blurry to read. But it is obvious that it is all about reserves and of course that old saw, technological progress. I could barely make out this sentence:

"Longer term, fears of peak oil production are also unwarranted in light of technological progress and the major discoveries of the past decade."

So there you have it, Goldman Sachs are placing all their bets based on those huge discoveries of the past decade and all those new superstraws that technology has delivered to us.

They listed all those major discoveries but it is too blurry to read. I wish I had the original of that chart. I googled but was unable to find it. Anyway there were 15 of them and I doubt that the total recoverable oil from them would be anywhere close to the oil consumed in the last 10 years.

Ron P.

Selling the sizzle Ron...selling the sizzle. Like they say: follow the money and the truth will be found.

Ron - do you mean this chart? This is just a lame roundup of major discoveries of the Noughts. Kashagan of course has been repeatedly delayed; the Ugandan blocks and Brazilian finds are at least a half decade away from reaching meaningful production. The total output from these projects as it stands is <1 mb/d, for those who are interested in such things.

Yes KLR, that is the chart. Thanks a million and I am definitely interested in such things.

I totalled the reserves of all these fields, taking the middle point where the estimate was a range. The total come to 54.75 billion barrels or less than two years at current consumption. Of course as you say this is just a lame roundup and undoubtably some are left out. But this is less than one barrel discovered for every five produced. To my way of thinking this is nothing to brag about.

Also the very largest field listed, Kashagan in Kazakhstan, they show estimated production cost at $100 to $110. Is that dollars per barrel? If so how in hell do they expect to even break even? No wonder the field has been repeatedly delayed. What is costing so much?

Ron P.

The oil is incredibly sulfurous--16 to 20% sulfur under high pressure. The roughnecks have to wear gas masks.
A major leak on the giant Caspian Sea would be environmentally devestating.

The Kashagan field in the Kazakhstani sector of the Caspian Sea remains the largest oilfield discovered since Prudhoe Bay, Alaska, in 1968. Measuring 25 by 45 miles, two and a half times the size of the nearby and better-known onshore Tengiz field, it is routinely ranked as the fifth or sixth biggest in the world and has the largest reserves of any oilfield outside the Middle East. These reserves are currently estimated at 38 billion barrels, of which up to 13 billion are judged recoverable. However, a combination of formidable technical obstacles has delayed the field's entry into production.

For example, temperature extremes range from -25 to +100 degrees Fahrenheit (-30 to +40 Celsius). The waters are shallow, generally no more than 10-12 feet deep, and freeze over for at least four months of the year on average. Also, the reservoir itself is rather deep and under very high pressure. Moreover, the sulfur content is estimated to be between 16 and 20 per cent, and would corrode pipelines if not treated and removed beforehand. Finally, Kazakhstani law requires that the associated natural gas be captured rather than flared, and it also has provisions requiring appropriate care be taken not to damage the environment, including delicate, protected plants and animals.

About 80 percent of Kazakhstan's oil has nowhere to go today, other than through Russia's pipeline system. Half the remainder is exported through the Georgian Black Sea port of Batumi, the seaside capital of the Georgian autonomous province of Ajaria; the rest goes to China. So Kazakhstan has now decided to construct a 590-mile pipeline, for Kashagan oil in particular, running from Eskene, where Kashagan’s onshore processing facility will be located once full-field development gets under way, to the port of Kuryk, near Aqtau. Starting at 500,000 barrels per day (bpd), its volume would later be increased to 750,000 bpd; to this, another 400,000 bpd may be added by doubling the capacity of the Aqtau port itself.

This pipeline, provisionally estimated to cost US$3 billion, will be the main section of a projected Kazakhstan-Caspian Transportation System (KCTS) that will include expanded and upgraded ports as well as construction of tanker fleets and, if necessary, additional pipelines within Kazakhstan itself. Parties to this agreement are the national energy trust KazMunaiGaz, TengizChevrOil (the consortium developing the Tengiz field, led by Chevron), and Agip KCO (the consortium developing the Kashagan field, formerly led by Eni: comprising the national company KazMunaiGaz, holding 16.81%; Eni, Total, and ExxonMobil, and Shell, each holding 16.66%; and ConocoPhillips and Inpex, each holding 8.28%).


Investment Strategy Group does not understand deflation. They should take a lesson from Stoneleigh:

ISG's views on the dollar and inflation are negative for gold but are partially counterbalanced by LOW REAL INTEREST RATES (!?)

This viewpoint renders their entire article simple rubbish. Loans/borrowers are failing left and right due to HIGH real interest rates. (Deflation expands the real value of the principal owed. Even if nominal interest or debt service rates are low, the deflating principal expands exponentially creating high real rates.)

T. Durden suggests:

Blankfein's people point out that panics over the dollar's viability tends to break out regularly. One thing they don't point out is that on none of the previous occasions mentioned, did the Federal Reserve have to expend trillions (at least $2.5 by the time QE 1.0 is over) to transfer the bulk of private risk to the public balance sheet. Maybe, just maybe, this time it is not only different... it is also much, much worse.

Nobody points out the $2 trillion expansion of the Fed's balance sheet is and was CASH that was stuffed into the pockets of Goldman and other Wall Street/finance insiders and has simply disappeared from circulation. America's brouhaha over investment bank bonuses is but a bagetelle, a piece of this grandest of all larcenies.

Other than the faux pas over deflation, GS as a money center fails most miserably with their Peak Oil nonsense; in money terms, peak oil took place in 1998! Yea, it's not a concern, it WAS a concern and now the other related concerns are kicking the world's economic ass! Goldman missed the party, they are missing the current party and will miss the rest of the party. People do not measure fuel with an eyedropper, they measure with their money.

"A tank of gas cost me $40!" versus, "That tank of gas cost me $12." That was peak oil, bub!

All this fits nicely into the Yahoo article on gasoline becoming too expensive for strapped consumers. $100 crude oil is probably out of reach. High gas prices => less demand => rising inventories => lower prices for crude also => less business in general (for allocation reasons) and pressure on refiners whose margin evaporates as volume shrinks.

$85 is the new $147.

Usually you make some interesting points, but mostly what you say here is "rubbish" - as you might say yourself when describing the work of others.

Unless you can offer some proof of some massive monetary conspiracy involving hundreds on Wall Street, the Treasury, and Fed, the answer as to where the $2 trillion came from and went is, well, rather obvious. It did not go to mostly to GS, or Wall Street. As far as I can tell, the biggest beenficiaries of this are the PIMCO funds and China.

Anyway, new money is essentially printed up by the Fed, who uses that to buy mortgage pools. These mortgage pools were mostly orgnazied by Fannie and Freddie, and mostly were owned about 1.5 years ago by China and PIMCO, and some other central banks.

Both China and PIMCO used most of that money to buy US government securities, and to a lesser extent debt of other countries. That new $2 trillion did not disappear, or cause deflation, or otherwise disappear. Ironically low interest rates then are a symptom of money creation, rather than an expectation of deflation.

I am also rather curious as to where you see 'deflation' in the prices of essential food and energy costs, because as far as I can tell, prices in those areas are much higher than a year ago. Despite having a CPI that is commonly quoted excluding those categories, they are actualy the most important in determining changes in the standard of living.

Also I'd like you to explain what 'lesson' we are to learn from Stoneleigh concerning deflation - most of Stoneleigh's predictions in a much discussed TOD article here a few months or so back have turned out wrong.

Food and energy, over the last year, are a wash. Energy is up, but according to this week's report, food prices are down. Way down.

Energy led consumer prices higher last year, offsetting the biggest drop in food costs in nearly a half century, the Labor Department said Friday.

That has been my personal experience. Gas prices are higher than they were, but food is so cheap it's ridiculous. They're practically giving it away.

And Shadowstats shows the money supply is crashing, at least as measured by their estimated M3.

Chart of U.S. Money Supply Growth

The Fed is running a money laundering operation. It turns (worthless) illiquid assets into cash.

Pretend you bought a $800,000 house with a $750,000 mortgage in 2004. You sold the house in 2008 for $1.2 million; you paid the mortgage and kept the difference. You laundered $750,000 in credit into $350,000 in cash.

This was and is perfectly legal. Everyone knows that real estate only goes up. Intent is the key aspect of the process.

On the grander scale, the holders of illiquid (blatantly worthless) finance assets such as stocks, bonds, derivatives, MBS and other instruments are selling directly - if they are banks or primary dealers - or indirectly through banks- as- agents to the Federal Reserve for cash or swapping for Treasuries which in turn are easily sold. The assets are known to be worthless, in fact the arguments surrounding the alphabet soup of rescue facilities has orbited around which and various 'par values' should be applicable.

Consider the Tim Geithner/NY Fed/AIG/Goldman fiasco; the Treasury paid for othewise worthless CDS's to benefit Goldman:

Where did that money go? Answer; executive bonuses.

Fed/Treasury swaps and purchases are theoretically reversible; that is, the funds are returned to the Fed and the original instruments to the banks/primary dealers. As John Hussman PhD. points out, the swaps are non- recourse, meaning the Fed cannot call back the funds, or are outright sales.


An argument is made that the funds in question are simply lent back the Fed where they earn interest. These 'reserves' are more likely to be bank IOU's and not cash. This is from Mike Shedlock:


Also from Mish:


A good example of laundering illiquid securities into cash is Goldman- Sach shorting mortgage securities it was peddling to clients, knowing the terms of the securities would inevitably lead to failure - and success of the short sale.


Turning illiquid assets into cash benefits the sellers of assets of all kinds:


I can go on and on. The emphasis is 'socializing losses and privatizing profits'. What I suggest is the logical conclusion that can be drawn from a massive expansion of currency during a currency shortage. Someone has it. Where's mine?

You don't have to be a conspirator to benefit, only savvy. If you know the Federal Government will guarantee the cash price for your assets; that both you and your counterparties know are worthless. You try to position yourself to obtain the guarantee and allow the conversion of assets to cash. What you don't do is rock the (stock market/bond market/real estate market) boat. Believe m, the smart money has already cashed out and sold to the dumber money. The rest wait in queue for the opportunity to grab some newly minted cash. There are hundreds of trillions of illiquid assets; it's a long queue.

Where is the cash? It's harder and harder to find. As Leanan illustrates elsewhere, it's not in the currency multipliers. Makes most sense that the rich are lining their pockets. Don't complain to me, run out and get some cash! Go, go go! Hurry, before Bernanke is fired or the whole system totters.

As for Stoneleigh; she appears to be less bearish than the smart money crowd which sees no future in investing in the country's businesses, takes the cash and runs, instead. I guess the smart money has figured out peak oil on their own. Between you and me, I am much more bearish than she, as I feel that all- out thermonuclear war is inevitable, wiping out much if not all of the human race. When? Not tomorrow; but, next day???

Stoneleigh is merely a deflationist.

The most recent IPM from the EIA shows 2009 world crude production below 2004 world crude oil production. 2005's crude production is about 1.7 m/b/d higher than the first 10 months of 2009. Even in 2008, with oil up to $147 a barrel, world crude oil production did not exceed 2005, although it was close.
The current account, Federal debt, and government bailouts have damaged our finances and debts beyond what we can pay for. At some point, foreign acceptance of our debt will diminish at a faster rate than now. The printing presses running under Bernanke have created a huge lack of confidence in the US dollar. GS can spin it anyway it wants, but one must consider the source.

Banks in Ill., Minn., Utah are shuttered

Regulators shut down banks in Illinois, Minnesota and Utah on Friday, bringing to four the number of bank failures so far in 2010, following 140 closures last year amid the weak economy and mounting loan defaults.
The failure of Barnes Banking is expected to cost the federal deposit insurance fund $271.3 million. That of St. Stephen State Bank is estimated to cost $7.2 million; that of Town Community, $17.8 million.
The number of bank failures is expected to rise further this year. The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years. The agency last year mandated banks to prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.

Some scary math here. They are expecting 100/4 = $25 billion a year in costs to close banks, yet they only collect 45/3 = $15 billion a year in premiums. Not exactly a great business plan :(

"Some scary math here."

It's just BAU fuzzy math. They used to call it "New Math".

Oh, they will make it up on volume :->

New Federal Funding makes Streetcars more Desirable

WSJ Article



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The document you requested either no longer exists or is not currently available.

Murdock pulled it off that link (I tried it 2 minutes before posting).

New link


It is worth noting that 80 US cities may be eligible.


Never trusted Murdock much. Thanks.

The problem was that you had a stray "/" at the end of the link.

"A Desire Named Streetcars"

After Alan gave a presentation in Dallas and did a radio interview, the powers that be in Dallas started getting serious about a downtown streetcar system. Of course, would have been simpler and less expensive just to keep the 200 miles of electrified streetcar lines that we had up until the late Forties.

Can anybody compare the cost/benefit of using turbines for cogen as compared to reciprocating engines? My college is creating a climate action plan and cogen is among the many options being considered.

Here is a nice reference graph of steam engine efficiencies:

Unfortunately the heating value of coal is not defined in the above chart. I have seen values of 13,500 BUT's per pound in some 19th Century literature.

The efficiencies of steam engines and turbines increases with size, and varies with loading and details of each machine, so to make a realistic comparison you need data on the actual engine or turbine.

Also you are talking about a back pressure or extracting turbine for cogen, meaning that the exhaust pressure is not at condenser conditions for a back pressure turbine, but may be at something like 50 psig, or for extraction it could be partly extracted at 150 psig and 50 psig (or other conditions as needed) with the balance going to the condenser at a few mm mercury absolute pressure.

The amount and pressure of steam available by extraction is only variable within design limits.

The last time I saw an operating steam engine was on a ferry crossing the Mississippi River in 1964. I never saw one in an industrial plant.

I think the original question was regarding the comparison between diesel and gas turbine systems for heat and power applications. Steam power using either turbines or reciprocating engines exhibit lower thermal efficiencies for producing rotating power than does a diesel engine. Gas turbines (Brayton cycle) aren't as efficient as diesel, but using a combined gas turbine/steam cycle can result in higher efficiency compared with either system operating alone.

In a situation where a large fraction of the thermal energy is to be captured, I suppose it would be important to know the ratio of the electrical load vs the thermal load. If the thermal load is much larger than the electrical demand, it would make sense to use a low efficiency electrical generating system, then recovering as much of the otherwise "waste" thermal energy as necessary to meet the thermal demand. Given seasonal differences, the best solution would not be clear without a careful analysis, IMHO...

E. Swanson

Cogen as is typically used in industry means steam. Normally, waste heat from diesels is not high enough temperature to do much of anything with. Temperatures of internal combustion engine cooling water range can be had by throttling back on the cooling water to the turbine condenser, assuming the turbine can handle it. The power reduction from the turbine can be calculate using a Mollier diagram(temperature, enthalpy, entropy).

In the case of diesels the efficiency ranges from 35% for passenger car size engines up to 50% for container ship size marine diesels. Regardless of efficiency, if you need low temperature waste heat, diesel cooling water heat is essentially free, but require capital.

Calculating the net change of the cost of steam relative to electricity with cogen is not straightforward because one is traded for the other. Also, the mix has to be within acceptable limits. Also, there have been projects undertaken to save steam only to find out that the turbine input was maxed out and the steam had to go to a waste condenser.

The University of Texas at Austin gets major savings by gas turbine cogeneration. Natural gas fired turbines generate electricity for the campus; the waste heat provides building heat and hot water, maybe air conditioning too. They are even building a large tank to cool a new building: they run the A/C to chill water during the night, then use the cold water to cool the building during the day, so they avoid having to have an additional air conditioner.

In a nice touch, one of the generator buildings is adorned with large metal plates engraved with the names of scientists who were energy pioneers: Watt Franklin Carnot Zeuner ...

maybe air conditioning too

Air conditioning from hot water?

Adsorption cooling. Not particularly efficient, but if you are using waste heat it is.


I had a tour of UT's system when I was a student there. They have a cobbled together# combined cycle-co-generation system. Over 50% efficient.

# They use an old steam boiler instead of a new "matched set" turbine and steam boiler combined cycle.


By some search in the internet I have found a PP presentation from the Oklahoma Geological Survey (www.ogs.ou.edu/GraniteWash/GWOverview.ppt). It seems to me drilling in shale and granite plays for natural gas is like deflating a tire. First comes the gas in a flush, then the flow ceases to a breeze. Obviously all "prolific" plays in compact rocks have the same problem of rapid decline, undeterminable reserve amounts and horrendous costs, so you´ll know only in the end, whether it was a rewarding drilling. And when you hear, shale gas is the future for the USA and it will be the future for Europe, when eventually enough drilling is done, so doubts are apposite, how wells with a half-live of a dozen weeks or a few months could sustainably feed an economy. According to the Oklahoma study the half-lives of granite wash wells are even shorter than the ones of the shale wells.

All true watcher. The tire deflating is a great analogy. But I'll add a little amendment. Despite the arguments from some operators most have a pretty good idea of a well's profitablility as soon as the initial flow rate is measured. Due to the rapid decline rate you describe a well has to make it's profit within the first couple of years. That's why many trends fell flat quickly when NG prices fell. Unlike many conventional reservoirs (where you can hang on waiting for prices to rise) many shale gas plays need higher prices from day one to be drilled.

Which prompts me to ask: RM, after a shale gas hole is drilled, is it feasible to put things on hold and wait a year or two (for better prices)? Is there a point of no return? And how quickly can a prospective play be drilled once a decision is made?

Tnx in advance for any info.

dave -- You can shut a well in indefinitely in many cases. Some leases require a minimum royalty payment...usually not exorbitant. If not, most leases allow you to open the well up for just a few hours once a month so the lease qualifies as "held by production".

The key question is whether the operator can live without the cash flow. Shutting a well in does reduce the rate of return if prices stay constant but most operators stop worrying about ROR after a well is completed. If one predicts an upward price correctly it can even generate a better ROR. But in 34 years I’ve seldom seen an operator shut a well in to wait for better prices. Most companies live and die by their cash flow. I recall Chesapeake saying they were going to reduce their SG production rate earlier this year for just that reason. Never did see if they did and by how much. In reality I’ve seen more operators struggle to increase production rates during low price periods to maximize cash flow. It can somewhat akin to starving to death while you have a lot of money in the bank but can’t withdraw it. This is why you’ve been seeing more production/company acquisitions as prices fell. Companies have to liquidate properties (often as at a big discount) to generate enough income or return to investors. IMHO this was a prime motivator for XOT swapping their stock for ExxonMobil stock: the shareholders saw that move as the best way to maximize the ROR on their investments. Given the $10 billion debt XOT had I suspect they were projecting an inability to service that debt to an adequate degree as well as carry on meaning operations. And getting refi these days isn’t a walk in the park.

.....Chesapeake saying they were going to reduce their SG production rate earlier this year for just that reason. Never did see if they did and by how much.

afaict, chesapeake's curtailment was a token effort. "investors"(meaning stockholders) are not particularly impressed by a company shutting in wells for some undefined future benifit.

Not surprising to hear elwood. Given how Ch seems to struggling with a capital short fall it didn't seem like they could forego much cash flow.

We just have conventional natural gas and some coalbed methane here in Alberta, and our procedure is to throttle back the wells to the minimum contractural requirements until prices improve. We can't shut down completely because the driller has a back-in agreement, the pipeline operator has a minimum flow requirement, and the investors (such as me) expect a little something from time to time. That's why the NG market has been so insane over the past couple of years; everyone needs cash flow even if it means eating next year's seed corn.

So true Dale. We've just started the drilling phase so we've got little production at the moment. But when we get cranked up our owner will have to choose between preserving reserves (to sell out when we hit another price peak)and regenerating our capital base. With oil where it is and NG getting ready to head north of $6/mcf we'll probably blow and go until we get to each project payout. Then the boss man will have to make that call.

Nice problem to have, eh? LOL

I assume GraniteWash is a misnomer. Granite is a plutonic (igneous) rock, and unless you believe in abiotic gas you wouldn't expect to find any NG in it.

EOS -- granite wash is actually a sedimentary rock despite the odd name. I'm sure you've seen a talus slope along the base of a mountain. That's a typical depositional environment. The sediment is so immature and coarse it can look like ground up granite. Thus the name. Commonly found along the base of an eroded and buried mountain system. Any hydrocarbons are usually of a fresh water origin. In some case the source rock is a marine shale that's deposited over the eroded mountain as the seas transgress. A rare combination of rock type and source thus seldon ever developed.

"The Lesson of Haiti"

by Fidel Castro


"Later that night, he reported that Cuban doctors and ELAM’s Haitian graduates were being deployed throughout the country. They had already seen more than 1,000 patients in Port-au-Prince, immediately establishing and putting into operation a hospital that had not collapsed and using field hospitals where necessary. They were preparing to swiftly set up other centers for emergency care.

We feel a wholesome pride for the cooperation that, in these tragic instances, Cuba doctors and young Haitian doctors who trained in Cuba are offering our brothers and sisters in Haiti!"

Been a while since I as an American felt "wholesome pride".

"........ Haiti constitutes the disgrace of our era, in a world where the exploitation and pillage of the vast majority of the planet’s inhabitants prevails."

Having been to Haiti and other parts of the developing world, it's hard to disagree with Fidel's assessment of things. Yet most Americans would rather change the channel to "Reality TV".

Cuban Doctors have been a valuable asset to almost all of the Third World, and a showcase for Cuba as a society and country.

Here's an older article that discusses in great detail the question of why Haiti is so poor. It is astounding that all these conditions continue to exist (especially in the face of 10,000 NGOs operating in the country for decades) and goes a long way towards explaining what is happening at this time in Haiti.


Chris Nelder interviewed by Jim Puplava:

Home page:

The interview starts at 43:53.

Who is Chris Nelder and what is the interview about?

yesterday evening i fired up the "cat" stove as usual. it takes 2 hours of baby sitting to get it
fired up just right. constant monitoring also. so it's only weekends. working at the factory tires me out during the week. (have you reduced your lifestyle today?) i dont sleep regular weekends. just 2 hour naps so i can throw more wood in the stove. from 38 degrees at 5pm it dropped to 32 degrees by saturday sun rise. i loaded more fuel. then around 10:30am the sun came out. open the bay window curtains. living room and dining room up to 78 degrees. stove burns out. soon, around 6pm saturday or temps at 39 degrees, it's restart the stove.

the warmer weather during this week melted the snow off my solar PV panels. as of 4 pm the system generated 7 KWH which went to running my electric drier. the inverter never went over 6 amps. this was with bright sun.

back to the "cat" stove. when the air flow control lever is at maximum it produces 26,000 BTU's/hr far out surpassing the solar PV on the roof. oh sure, i had to sweep out yesterday's ashes and haul and cut some wood. but it sure is nice and comfy. i recognize the fact that trees i burn harnesses the sunlight over many years. the stove cost me $3000 installed and some sweat equity procuring wood. the PV system cost me $25,000. do the math.

speaking of math, metaphorically at any rate, the u.s. military costs hundreds of billions of dollars every year for the past 25 years. is that sustainable?

titan, a moon of saturn is covered in hydrocarbons (although some say it aint). think of the adventure of going there and getting that "juice". pundits say that we need 6 earths to get everyone up to uhmerikan lifestyle. it's that or die off. but we waste untold resources preparing for and actually doing war. these same pundits quibble philosophy about lifestyle changes. well, here's a lifestyle change, let's go to titan and get us some hydrocarbons. i envision a spaceship just dropping a long hose and sucking it up or in a flyby mission to lower a huge bucket and scoop some up as it whizzes by. so...ok smarty pants, what's your bright i-dear?

how about we let all those gold man sacks boffins continue to do god's work? fatten them up and when
TSHTF we eat them. mmmmmm,yummy. "it's all good"

Speaking of wood - I had a fairly tall oak blow over a couple of months ago but it hung up about 60' up in some firs that were close. I could have dropped one of the firs but that was really dangerous. So I asked my neighbor to bring up his D-5 CAT and pull it down when he had a chance.

Well, we had another wind storm early this week and it came down. On the way it stripped the branches off of three firs that were up to 6" in diameter.

It'll be nice to have the wood but there are other tress I really want to fell either for fire protection or let the sun shine on the road to melt the snow. Guess you can't win them all.


the warmer weather during this week melted the snow off my solar PV panels.

I've read you complain about snow on your PV panels before, and perhaps this has been answered, but why don't you rig up a broom, squeegie, or some other contraption, and just brush the snow off each morning?

I have a bit of a disagreement with the author of Clean Coal jobs. Not that I believe we will ever see clean coal. But, if an industry employs few people directly but sends heavility of equipment, somebody somewhere will be employed manufacturing and maintaining the equipment. Of course few of those jobs will be local. But in the context of the world economy, jobs are still being created.

This is not the Mojave Dessert. It's Copper Hill, East TN, in 1965 after decades of surface mining.


Its population went from tens of thousands to less than 500 today. 45 years later, after decades of reclamation, it's still a useless scrubby wasteland. But let's go get the coal. It means energy and jobs..........somewhere:

West Viginia real estate, anyone?


Looks like a good location for a strip mall.

Part One of the Barron's Roundtable discussion is out. I am always interested in what Marc Faber has to say. Incidentally, it appears that the average return on investment for his 2009 recommendations was about 75%. I have lifted a selection of Faber's comments from Part One:

Faber: Listening to all of you, I have come to the conclusion that we are all doomed. The Fed and certain academics in the U.S. don't understand the instability brought about by excessive credit growth and artificially low interest rates. In a 7,000-word article in the New York Times several months ago, entitled "How Did Economists Get It So Wrong?," Paul Krugman [the economist and Princeton professor] nowhere mentions that excessive credit growth or leverage was the cause of monetary instability and brought about the financial crisis. In a Jan. 3 speech in which Mr. Bernanke talked about monetary policy and house-price inflation, he never once mentioned excessive credit growth. The Fed has learned precious little and will keep interest rates at zero forever. Even if it raises rates, they will be below zero in real terms. If I had been a professor, I would have let Mr. Bernanke pass his exams, but I would have told him never to become a central banker. . . Anyone who owns natural resources around the world should send him a big thank-you note, however, because as a result of the credit bubble, the U.S. overconsumed, shifting wealth, capital spending and employment to emerging markets. And as those markets kept growing, they drove commodity prices higher. . . Jobs lead to consumption, but what leads to jobs? Capital spending. For the past 25 years, policies in the U.S. have been driven by the desire to stimulate consumption instead of capital formation. And capital formation isn't just building factories. It is education, research and development, infrastructure and company plants and equipment. . .

Faber: That is why we are all doomed. The deficit will be above a trillion dollars a year as far as the eye can see. One day, Mr. Bernanke or whoever is at the Fed will have to increase short-term interest rates. When that happens, America's interest burden will go up dramatically. Interest payments could go to 35% of tax revenue in 10 years' time, but that is an optimistic assumption. I'm inclined to think 50% of tax revenue will go toward interest payments on government debt in 10 years. Then you are bankrupt. There is only one way out -- the Zimbabwe way. You will have to print and print and print.

I haven't checked in here for over a year, but lurking all the while. Lots of traveling in South America, looking for the next perfect place.

But I had to comment on the lead article in today's Drum Beat about population control. This is indeed the "elephant in the room" that no one wants to talk about. None of the current world problems (resource shortages, pollution, AGW, etc.) could exist if we got together and insisted upon a world population that maintained a sustainable level. But this subject seems to be off the table for now -- but hopefully not for TOO long. Will there be more centuries of over-crowded misery?

I mean jeez, I wrote my high school "graduation thesis" on this subject back in the 60's, and got an undeservedly low A- grade. But my sociology teacher was a Catholic.

Well now, you can't blame it all on the Catholic church or anything else but our uncontrolled desire to make babies -- to put it politely. And also such venerable wisdom as "Go forth and procreate" that we still consider to be, umm, gospel. Bad choice of words.

But I've had the occasional loose thought that the increasingly large number of homosexuals in the world may be nature's own compensating response to over-population, and this could in itself eventually bring things back into balance. OHH NO, not ANOTHER unmentionable subject!

Meanwhile, as we are quickly learning, we're in for a rough ride.

Panama now writes from Iquique, Chile -- an old coastal mining town and popular sea port with an ancient electrified rail trolley system that still works! ciao

...if we got together and insisted upon a world population that maintained a sustainable level.

Panama, I submit that there is no "we" and won't be until TSHTF, when "we" are all screwed.

Your comment on homosexuality is funny. Some species of fish are all one sex until the population drops or there is some other stimulus that causes some of them to change sex so they can spawn.

Speaking of fish.....has anyone heard from Darwin's Dog recently? I notice he hasn't posted in a while. Hoping things are okay up his way.


I am more concermed about fleam.


fleam is fine. I've talked to her via email a few times, most recently about a week or so ago. Dunno why she hasn't been posting though. Haven't thought to ask. Her 'tales from the underside' were... interesting.

Actually the tram line opened in 2004 :-)

Nice tourist attraction.

Two cars, one horse drawn, the other battery powered.


Best Hopes for a start,